Crop Damage Greater Than Benefit From Scattered, Light Rains

* 'Popcorn' rains across western Corn Belt. Radar shows small cells of rains popping up across the western Corn Belt. More scattered, light rains are forecast through the weekend with the best chances for precip in northwestern and southeastern areas of the Belt. No one is calling for drought-breaking rains, but areas that are lucky to get some precip will gladly take whatever falls. Soybeans look to benefit most from any rains. While corn is pollinating in some areas, the extreme heat and dryness has already taken a major bite out of the corn crop, suggesting any rains now are likely too late to have a major benefit.

The long and short of it: Grain and soy traders ignored the rains overnight, suggesting they are focused on building more weather premium into the market. If Tuesday's post-report reaction highs are taken out, it would signal corn and soybean futures are ready to move the next leg higher on the charts. But with rains falling, there is risk traders could take profits ahead of the weekend.

* Chinese 2nd-qtr. GDP as expected. China's economy grew at a 7.6% clip compared to year-ago in the second quarter, which was right in line with expectations. But this marked the lowest growth rate in three years and was the sixth consecutive quarter of lower GDP, suggesting the Chinese government will continue to ease monetary policy in an attempt to boost the economy.

The long and short of it: While news of continued declining economic growth in China is not supportive, global markets actually got a sigh of relief in that the data didn't come in lower than expected.

* Moody's downgrades Italy. Moody's downgraded Italy's sovereign credit rating two notches Thursday and warned a further cuts may occur. There are rumors Spain may be next to have its credit rating downgraded by Moody's. Meanwhile, Spanish banks borrowed a record amount from the European Central Bank last month as they have largely been shut out from international dealings.

The long and short of it: The Moody's downgrade of Italy came as no surprise, and therefore, is having limited market impact. More focus is no the Chinese GDP data.